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ELCDismissedNot stated in the judgment· [2021] KEELC 3702 (KLR)

Wilson Karanja v Subukia Farmers Co-operative Society Ltd & another [2021] KEELC 3702 (KLR)

Environment and Land Court
15 April 2021
MOM.C. Oundo
3,126 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court refused to undo a land settlement a co-operative society had agreed to, because it proved no fraud or mistake.

What this practically means

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Executive summary

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Subukia Co-operative Society Limited (1st Defendant) filed a Notice of Motion dated 16th September 2019 seeking to set aside consent orders adopted on 5th February 2019, to reinstate the suit for hearing, to have a second memorandum of appearance deemed duly filed, to obtain police security, a permanent injunction restraining the Plaintiff from interfering with L/P Kericho/Sorget Block 1/286, and leave to file a defence, counterclaim and witness statements out of time. The application was opposed by the Plaintiff/1st Respondent, who had sued on 23rd May 2018 seeking rectification of title deeds after the surveyor established his land measured 5.193 Ha while the society's parcel held an excess of 0.693 Ha. The society's then Chairman, Secretary and Treasurer negotiated and recorded the consent, which was adopted as a court order in their presence and executed, with rectified titles and maps issued to both parties. The court framed the sole issue as whether the consent order of 5th February 2019 should be set aside. Applying the settled principles in Hirani v Kassam, Brooke Bond Liebig v Mallya, Flora Wasike v Destimo Wamboko, Munyiri v Ndungunya and Samuel Mbugua Ikumbu, the court held that a consent judgment has contractual effect and can only be set aside on grounds that would vitiate a contract. It found that under Section 28(3) of the Co-operative Societies Act and clause 31 of the society's by-laws, the Management Committee had full mandate to compromise the suit, and that no fraud, collusion, mistake or misapprehension of material facts was proved. The application was dismissed with costs.

Key legal issues

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01

Whether the consent judgment of 5th February 2019 should be set aside

Holding

The application to set aside the consent decree was dismissed; no valid grounds of fraud, collusion, mistake or misapprehension were established.

Reasoning

The court applied the settled principles in Hirani v Kassam, Brooke Bond Liebig v Mallya, Flora Wasike v Destimo Wamboko and Samuel Mbugua Ikumbu that a consent order is binding and can only be varied on grounds that would vitiate a contract. The court found the Chairman, Secretary and Treasurer acted within their mandate under Section 28(3) of the Co-operative Societies Act and clause 31 of the society's by-laws, and that no evidence showed they lacked authority. No fraud or collusion was proved and all material facts were known to the parties when they consented.

p. 4
02

Whether the society's officials had authority to enter the consent without a general meeting

Holding

The Management Committee had full mandate to compromise the suit without a general meeting resolution.

Reasoning

Section 28(3) of the Co-operative Societies Act empowers the Committee, subject to directions from a general meeting or the by-laws, to enter into contracts and institute or defend suits in the society's name. Clause 31 of the by-laws empowered the Chairman, honorary secretary and honorary treasurer to sign contracts on behalf of the society. Since no evidence showed the three officials lacked authority, they had full mandate to compromise the suit as they did.

p. 4

Legal principles established

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  • A consent judgment or order has contractual effect and can only be set aside on grounds which would justify setting a contract aside, such as fraud, collusion, illegality, mistake, absence or ignorance of material facts, or an agreement contrary to the policy of the court
  • The Management Committee of a co-operative society is its governing body with power to institute and defend suits and enter into contracts on behalf of the society under Section 28(3) of the Co-operative Societies Act

Court orders

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  1. 1.The Notice of Motion dated 16th September 2019 seeking to set aside the consent decree is dismissed with costs

Authorities

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Legislation

  • Co-operative Societies ActSection 28(3)
  • Co-operative Societies Act No 12 of 1997General
  • Subukia Co-operative Society Limited By-LawsPart VII; Clause 31

Cases cited (7)

  • East African Portland Cement Company Limited vs. Superior Homes Limited
    [2017] eKLR
  • Brooke Bond Liebig (T) Limited vs Mallya
    (1975) E.A. 266
  • Hirani vs Kassam
    (1952) 19 EACA 131
  • Munyiri –vs- Ndungunya
    (1985) KLR 370
  • Samuel Mbugua Ikumbu v Barclays Bank of Kenya Limited
    [2015] eKLR
  • Flora Wasike v. Destimo Wamboko
    (1982 -1988) 1 KAR 625
  • Kenya Commercial Bank Ltd v. Specialized Engineering Co. Ltd
    (1982) KLR 485
Jurisdiction invoked
Original civil jurisdiction over the suit and the Notice of Motion dated 16th September 2019 to set aside a consent judgment; not expressly stated in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Wilson Karanja v Subukia Farmers Co-operative Society Ltd & another [2021] KEELC 3702 (KLR)", Case Analysis (2021). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3702/eng@2021-04-15

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.